Altrad sets aside $100m for an acquisition in Brazil

valor international

French group Alstrad, one of the largest manufacturers of building products in the world, is seeking opportunities in Brazil and has defined the amount for an acquisition in the country: around $100 million.

In an interview with Valor, the group’s president, Mohed Altrad, pointed out it is present in four continents and wants to get into Brazil to have it as the base for operations in the rest of South America.

“Some years ago we had an opportunity in the Brazilian market, but the economic crisis came and we were very resistant,” he said. “But now we are open to acquisition, it is good to speed up when the others are braking.”

Mr. Altrad is seeking a company “sufficiently big” in the markets in which it operates to justify the deal and “avoid a fiasco that would be bad for all.” He said that Brazil is cheaper now, because of the devaluation of the real, and thinks $100 million may be sufficient for this type of deal.

Altrad is a global leader in the manufacturing of mixers, the largest manufacturer of wheelbarrows and the top vendor and leaser of scaffolding in Europe, the number 2 producer in France of tubular formwork products for local authorities, in addition to being a producer of compacting equipment and concrete mixers.

Mr. Altrad grew up as a Bedouin in Syria, came to France 46 years ago with a scholarship and survived with one meal per day. Today he is on the Forbes list of French billionaires, worth an estimated $1 billion.

In 30 years, Altrad acquired nearly one hundred companies without resorting to the stock market. Since last year, the group doubled its size. First, it paid €230 million for the control of Dutch rival Hertel, a company specialized in setting up and dismantling scaffolding structures on oil platforms, port terminals and gas complexes. This year, it spent €450 million to buy a French competitor, Prezioso, strengthening its position in services of industrial maintenance, access structures and anti-corrosion protection.

This way, its revenue is likely to rise to €2.5 billion this year from €1.6 billion in 2015, with a forecast EBITDA of €300 million. In one year, the number of employees rose to 22,000 from 10,000. “My ambition is to double to 40,000 workers, and this may be fast,” he said.

Mr. Altrad said the company operates in nearly 100 countries, from where it gets 80% of its sales, with the remaining 20% in France. It has 22 factories and considers that having local production in Brazil will help it expand in South America.

“I’ve never been to Brazil, but I know the country’s and region’s potential,” he said. Based on the information he got, he reckons the economy may have hit bottom and now tends to recover.

Mr. Altrad considers essential to have a strong international presence in order to balance the group’s earnings. “Look, in Great Britain the market for us is good, in France it is stable, it grows in Germany and in China it used to grow 15% and now 6%, but it expands nonetheless,” he exemplified.

Having been named “entrepreneur of the year” at an event of consultancy EY in 2015, Mr. Altrad was invited by French President François Hollande to direct a program to fight unemployment.

“France has a €2 trillion debt and need reforms, but President Hollande took long and now it seems it is no longer possible [to carry out the reforms in his term],” he said.

Mr. Altrad is engaged in sports as owner of Montpellier Hérault, a rugby team, whose stadium bears his name since September last year. But he dismisses rumors of acquisition of the Olympique de Marseille, one of the most popular soccer teams in France. “It is a very difficult team,” he said.